BTC Plunging

Bitcoin prices remain heavily weaker at the start of November after BTC futures posted their weakest October returns in 12 years. ‘UPtober’ has it has been named among crypto fans, failed to materialise this year as AI funding fears, a crash in risk assets and hawkish Fed expectations combined to weigh on crypto sentiment. The decline in futures prices comes amidst a heavy exodus of capital from the ETF space. BTC ETFs recorded almost $400 million in outflows yesterday, perhaps reflecting a period of risk adjustment ahead of the US midterms which take place today. This comes on the back of almost $2 billion in outflows across October as the market pulled back.

US NFP On Watch

Looking ahead, there is plenty of downside risk for BTC given the US NFP release due on Friday. The market is currently pricing in around a 75% chance of a Fed hike in December. If Friday’s data surprises to the upside this could see this pricing jumping higher, sparking a fresh move higher in USD and weighing on BTC and the broader risk market accordingly. On the other hand, BTC could find some support this week if USD weakens in response to an expected Democratic sweep at the US midterms if that outcome materialises. The caveat to this is that any escalation in the US/Iran war could drive fresh buying in USD regardless, pushing BTC lower again.

Technical Views

BTC

The breakout above the $83,385 level has long been forgotten at this point with price having since reversed heavily lower and now retesting the $75,370 level. This is a key level for bulls to defend in order to prevent a deeper drop down towards the $69,605 level next, in line with bearish momentum studies readings.